Tuesday, July 17, 2012

Wildfire risk and the heat on insurers

Lloyd's: Rising temperatures worldwide mean increased wildfire risk and new challenges for insurers. Recent dramatic footage of the wildfires blazing across Colorado will resonate with communities across the world.

The Waldo Canyon Fire, northwest of Colorado Springs in El Paso County, destroyed over 300 properties - making it the most destructive wildfire recorded in the state’s history. It came after a week of Texas wildfires in which insured losses from more than 180 outbreaks could reach $250 million.

But wildfires are a big problem in many countries – and there may be worse to come. A recent report from climate scientists at the University of California, Berkeley, and at Texas Tech University says that climate change is disrupting wildfire risk around the world. The scientists say, “substantial and rapid shifts are projected for future fire activity across vast portions of the globe”.

The scientists found that by the end of the century, almost all of North America and most of Europe will see a jump in the frequency of wildfires, primarily because of increasing temperature trends, and that decreases in fire activity (due to increased rainfall) are less pronounced and concentrated primarily in a few tropical and subtropical places.

“There is a growing body of evidence that points to more frequent and severe wildfires as a result of climate change,” says Neil J. Smith, Manager of Emerging Risks & Research at Lloyd's. “A recent report from the Intergovernmental Panel on Climate Change found that drought, coupled with extreme heat and low humidity can increase the risk of wildfire.”

Smith says that underwriters who continue to rely on traditional risk assessment and pricing methods based on past experience - unaware of such climate-driven developments - could under-price the risk....

June 2009 – At the studios of Cleanskies TV, I was interviewed about the costs of climate change, and discussed adaptation efforts underway in the US and around the world.

May 2009 – I helped draft the scenarios for Rising Waters, a multistakeholder scenarios effort focused on climate change adaptation in the Hudson Valley. The final report is now completed and available here.

May 2008 – I reviewed two books on climate and energy in the New Leader magazine: James Gustave Speth's The Bridge at the Edge of the World: Capitalism, the Environment and Crossing from Crisis to Sustainability, plus Robert Bryce's Gusher of Lies: The Dangerous Delusions of Energy Independence.

January 2008 – A very local paper covers a very global issue.... The Litchfield County Times in northwestern Connectictut ran an article in January 2008 about Carbon-Based.

Now available: Climate Change Adaptation in 2011

A selection of my writings from 2011, plus some of my posts, as well as links... all focusing on the risks of climate change